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Posts from the ‘Organizational Structure’ Category

There obviously isn’t a clear and straight forward answer to this question. The answer depends on the perspective of the person you ask and what they value. After working 10 years in corporate America, I came back almost 3 years ago to work for a smaller organization (less than 100 employees). Two of my colleagues (Yves and Ida) also recently made the switch. We got together to exchange our thoughts on why we believe working for a smaller organization is better for us.

Martin: You have spent a large part of your career working for large organizations, what struck you when you joined Pyxis?

Yves: One first obvious observation goes along something I experienced before in a young publicly traded technology startup (less than 100 employees). For a given amount of effort you invest towards an initiative, whether on a individual scale, with a group or at the enterprise-wide level, your ROI (Return on Investment) is quite higher in a small organization than in a large one. The outcome on the initiative may end up being very successful in both environments, but in the small organization context:

The decision-making process will be faster and will involve less people;

The frequency at which you will be able to challenge and refine a set of actions on your initiative will be higher. Furthermore, your chances for celebrating at the end increases accordingly;

The whole initiative will execute at a faster pace and will complete sooner most of the time. Hence, a key variable inducing a positive impact is the reduced number of hand-offs between departments or people.

Ida: The first blatant differences I noticed were the lack of anonymity (you don’t feel like a number) and the lack of rules and regulations. The lack of anonymity puts you out there right away and is an enabler to allowing you to contribute and make a difference right off the bat. The fact that there aren’t many rules and regulations can also help in allowing you to make that difference faster, with no red tape to slow you down in your tracks.

Martin: Changing organization is an important decision that is usually done without having all the information. In hindsight, what information would have allowed you to make a better decision?

Yves: Organizational culture; without a doubt! Although I usually spend as much time being interviewed as making my very own due diligence on the organization, culture remains the number one factor for which you never get enough insights.

In an interview process, I do take extra care at being very transparent and straightforward on my value proposition. I do expect the same in return from the organization; and it is usually the case. However, the organizational part of the equation is far more complex than one individual being interviewed; putting everything he or she has on the table.

In hindsight, I do realize that most of my career changes would not have been different with more organizational culture intelligence at hand, so, same decision at the end. But gathering more info on that side of the story allows you to prepare yourself much better for the ‘culture tango’ coming at you.

Ida: From my perspective, I don’t feel that any additional information would have helped me make a better decision. The decision was a good one because of my mind set. I was ready for a change. I knew that a change in company or industry wouldn’t cut it, it had to be a bigger change of sorts, and ironically the BIG change translated into moving to a SMALL, privately owned company.

Martin: Many people who join smaller organizations feel more appreciated and a stronger sense of contribution toward the organizational goals. What are your thoughts on these?

Yves: Most of your actions in an smaller organization are very visible; for the better or for the worst… This allows you to have a positive impact towards your colleagues and the enterprise itself, without seeing all your efforts being diluted inside complex chains of commands, large hierarchies and impractical politics.

So, the visibility factor brings more appreciation and a stronger sense of contribution most of the time. It is actually a key attribute of smaller organizations, from my own point of view. This stimulates people at performing towards excellence, knowing their chances of being recognized for their hard work are quite high.

Ida: In a smaller organization, the impact is immediate. A decision can be made and an action is put in place. The lack of heavy hierarchies means that each individual is much more empowered to get things done and not necessarily have to wait for various levels of approvals as in large organizations. This empowerment is motivating, energizing and stimulating.

Likewise in a smaller organization, the breadth and depth of one’s responsibilitiesis usually much wider than in larger companies. This in itself provides additional satisfaction since people are not «boxed in» to a role that is strictly defined, allowing them the latitude to spread their wings.

Martin: What do you miss about working in a larger organization?

Yves: Sometimes, smaller organizations are facing challenges less prevalent in larger ones. For instance, financial stability may be a focus discussed over a monthly, or even over a weekly basis in a small company. Whereas in a larger organization, these matters will be discussed less often and more upon large-scale changes like restructuring plans and/or financial results being bellow expectations.

Furthermore, larger companies are having less of a hard time raising capital for their growing needs; in comparison with smaller organizations which are struggling a good deal in order to maintain an attractive balance sheet for banks and venture caps.

I still remember those funny days about 12 years ago; when it was so easy for startups to raise literally millions of venture cap out of PowerPoints or based on theoretical MBA classroom business cases. Hopefully these days are gone and we all now raise money based on common sense and sound financial practices. This however, illustrates how difficult it can be for a smaller organization to secure its financial future in 2011.

Ida: My answer to what I miss about a large organization is a two part answer, and each part contradicts the other, let me explain. Similar to Yves reply, financial stability is the most noticeable aspect that I miss. The luxury of knowing that there are enough funds to pay all expenses when they come in, invest in projects, expansions, acquisitions, etc. and be around in the long run, fosters an environment of growth, possibilities and positive reflections, in theory.

I say, in theory, because the existing reality in most large corporations, even though highly profitable, is the continual squeeze to do more with less. Hence the pressure is such that you are never profitable enough. It becomes an endless race. Factor into this internal pressure, pressures from the market and shareholders, legislation, the economy, and so on, and it becomes the endless race with umpteen hurdles. This is the part that I don’t miss, but it is very much tied to that financial stability I spoke of above.

Martin: Thank you Yves and Ida for sharing your thoughts on this topic. This was an interesting exercise. We may do this again in the near future.

Since being appointed president of Pyxis Technologies a few weeks ago, I have been wondering what it means to be “the president” of an organization with a non-traditional governance model. Wanting to be successful in my new role, it is important for me to figure out what is expected of me – hence the questions about the meaning and purpose of my job – and as if the universe wanted to ensure I would answer these questions, Raphaël prompted me to describe what the new role meant for me, during a recent visit to our Paris office.

Since our organization heavily relies on autonomy and self-organization, the new role made me feel like a manager within an Agile organization. So here’s what I came up with (so far):

Leading the growth of the organization: working with team members and the leaders of the various communities in establishing their vision and their objectives and supporting them in achieving the targeted growth by providing an external perspective and/or some experience and skills.

Raising the performance bar: most people agree with setting goals and my role is to ensure that people set challenging goals for themselves and their community. Achieving a simple goal might be easy but it doesn’t make people grow, it doesn’t take them outside their comfort zone. My role is to get people to step outside their comfort zone.

Providing the means for people and communities to grow: wanting people to step outside their comfort zone without providing support for them to succeed would not only be unfair and unreasonable, it simply makes no sense.

Ensuring people operate with integrity and holding them accountable: integrity is a simple concept for me, it means to “say what you do and do what you say”. Consequently, I am taking responsibility (until the community members do so themselves) to hold people accountable for their commitments in order to make sure they operate with integrity. Imagine how powerful an organization can be if people operate with high integrity!

Making sure each group has defined clear protocols and plays by their rules: I personally don’t feel the need to control what people and communities are doing but I need to make sure each group has defined clear rules so the team members understand what is allowed and what isn’t. There is nothing worst than erratic rules and behaviors for people to be un-successful at what they do.

Committing to making people successful: it is much easier to get rid of people when they don’t meet certain expectations than it is to work with them at closing the gap. I am not saying that nobody will ever be asked to leave the organization (there are legal reasons why we might want to do so) but in the case of lower-than-expected performance level, I am committing to truly work with people so they can succeed.

Coaching people: it is the team members and the community leaders who are part of the day-to-day action. As a coach, my role is to maintain enough distance to properly observe the team’s performance in order to ask powerful questions that will enable the team to find alternate ways to reach their objectives faster and more efficiently.

Adapting my leadership style: people and communities are at different level of maturity and based on the maturity of the group, I will adapt my leadership style to provide the best level of support for their performance.

I am pretty sure I will be adding to this list as weeks go by but it seems to be a good start. Needless to say, I am not kidding myself thinking that I will have a perfect score on all these fronts but making my job description public and asking my colleagues to hold me accountable is a challenge I am ready for.

Personality can be defined as a dynamic and organized set of characteristics possessed by a person that uniquely influences his or her cognitions, motivations, and behaviors in various situations – Wikipedia

Over 200 guests attended the celebration. Many of the people I had a chance to speak with during the evening told me they really noticed the personality of our organization – some of which even asked if we would hire them. François has done an amazing job at attracting passionate individuals who share a common goal and that truly reflects a Pyxis personality.

In line with a few posts I recently published (this one and this one) and following conversations with people (and managers) around me, I decided to take another stab at helping people managers transform into agile leaders. Contrary to popular beliefs, people managers in an agile context are not doomed to buy pizza for their team and getting out of their way…

One of the underlying principles of Agile is to help organizations become more adaptive and flexible in order to (more) quickly react to changes in their environment. In this context, the agile manager has an important role, despite the fact that his traditional responsibilities can greatly change.

In his new role the agile manager needs to acquire or develop these abilities:

Adapt your leadership style: Every team reaches a certain level of maturity and the agile manager’s leadership style needs to be adapted to the context of his group.

Make yourself available: Your team members will need help and they will need to turn to someone they trust. Make yourself available and keep an open mind when problems arise so you can actually do something useful for them.

Help your team remain focused: Well jelled teams tend to become enthusiastic about what they can accomplish and sometime lose focus and get distracted by shinny objects – this is especially true with software development teams. In his role, the agile manager can greatly help his team members keep their focus in order to achieve their objectives.

Secure resources: In every traditional organization, departments are typically assigned a budget to provide a certain level of service and as such, the self-organized team rarely has the maturity and visibility to obtain the budget it needs to protect and grow the unit. The manager remains the best spoke person for his team since he has developed the political abilities to influence people around him.

Become a consultant to the team: Develop your credibility as an expert in certain areas and make sure to bring that value to your team members. As a rule of thumb, you shouldn’t show up at their meetings unless you are invited.

Guard the team from disruption: Once the self-organized team demonstrates a high level of performance, others around will notice and are likely to request activities, tasks or special projects from the highly performing team. The manager must then block disruptions and maintain the team’s focus in order to remain productive.

Be a spoke-person and do marketing: The team will want to achieve a high level of performance and once it does, recognition from others is a likely contributor to their motivation. The manager is an position to promote the success of his team – and indirectly his own as the manager of a highly performing team. If you believe “marketing” to be inappropriate, think again. After all, the manager delegated some of his authority to the team and as such deserves to get recognition.

Increase communication and visibility: A lot happens outside the team. The manager has to bring the information about the organizational threats and opportunities back to his team. Sometime even gossips can be useful information for the team.

Prepare the team for the future: As the team undertakes some of the traditional management responsibilities, the manager can spend some time actually preparing the team members for the career development, especially if some of the members are interested in developing their management expertise.

Offer to help with retrospection: The team is typically very focused on their activities in order to achieve the objectives that were defined for them. As a consequence their retrospection are likely to focus on short term, immediate challenges they are facing and much less about the long term. The manager may offer to facilitate meetings geared toward the future.

Grow the team members: Observe the team in action. In collaboration with the individual team members, determine which area they wish to develop in order to achieve their career goals and support them by coaching them.

Overall, in such a context the agile manager needs to start focusing on a strategic perspective as opposed to a very tactical one which is often what managers do despite their many promotions over the years.

The change is likely to be positive not only for the team but also for the manager himself – only if he develops enough self-confidence and courage to start operating this way.

How agile you are doesn’t matter. Whether you are 50 per cent agile, 90 per cent agile or agile through and through (what ever that means), doesn’t matter. What does matter is that your company is satisfying its customers, stakeholders, and employees. (Achieving Agility: Means to an End, or End in Itself)

But let’s face it, people like to know where they stand compared to others. Starting at a very young age, we have been raised and trained to compare our results to others in an attempt to reach the next level – whatever the next level may be.

We get into such comparison as:

Are my grades better than Tommy’s?

Can I run faster than Carl?

Am I stronger than black belt Anna?

Did I earn more frequent flyer miles than Frank?

It’s the same thing with Agile. People – managers and executives mostly – really have the need to know they are headed for the top of the maturity model. It may not make much sense but they have been raised and trained to measure, to compare, and to brag when comparing favorably or to adapt when comparison isn’t positive for them.

As I already stated, I agree with Esther when she says that it doesn’t really matter how Agile you are. What matters are the results. So along those lines, I believe it is important to associate the level of maturity and the related results which I believe exist and can be demonstrated.

Unfortunately, there isn’t much hard data to demonstrate that achieving a certain level of maturity provides x% of improved performance or y% cost reductions but most of us who have been implementing Agile within organizations would agree that that higher the maturity, the better the results. So it is based on these observations that I decided to present yet another Agile Maturity Model.

As recently reported by Forrester, Scrum being the most adopted Agile approach these days, the proposed maturity model heavily relies on the adoption of Scrum practices with a lesser consideration to other practices such as: Agile Modeling, Feature-driven development – FDD, Test-driven development – TDD, eXtreme Programming – XP, etc. By no mean I am rejecting or considering those other approaches non-important. I built this model mostly on Scrum because this is the comparison organizations are asking us to be evaluated on at this time.

The Agile Maturity Model

Level 1 – Team Level Maturity

At this level, team members have decided to adopt Scrum and/or software engineering practices without asking for approval from their manager. Some of the well known practices are used but without consistency.

Team

A Scrum Master is in place

The Team has adopted some of the Scrum practices and artifacts but may not use them consistently

The process isn’t documented and tends to vary by project

Agile practices have been self-taught

Process is limited to the solution team

The team doesn’t understanding the language used by the business representatives

Department

Outside the team, almost nobody has heard or understand what Agile means

Other teams are unaware or not interested in the approach used by the Agile team

Mostly business as usual

Business

Unaware or not interested in the approach used by the team

Business as usual

Complains that what the information technologies team delivers is not what is needed or asked for

Misunderstanding of the language used for the development team

Project Managers

Unaware or not interested in the approach used by the team

Follow the traditional project management approach

Managers

Unaware or not interested in the approach used by the team

Business as usual

Results

Team is slightly more productive

Moral is slightly improved

Much friction with project managers, people managers and the business as the team members try to teach people outside the team what Agile is and what it can do for them

Level 2 – Department Level Maturity

At this level, the practices adopted by the team members have started to be imitated by other teams within the software development department. Some of the managers have noticed the positive results of adopting the Agile approach and are tempted to replicate what they observed.

Team

A Scrum Master is in place

Some of the teams have adopted some of the Scrum practices and artifacts and are starting to use them consistently

Consistency across the teams is uneven and mostly depends on the leadership and perseverance of a few individuals

Some of the process is documented but it tends to vary by team

Agile practices have been self-taught or a coach was hired to help the team launch their initiative

Process is limited to the department

Department

Mostly business as usual

Agile is sometime discussed in departmental meetings with some interest from people outside the team immediately impacted

An increasing number of teams are adopting Agile practices

Business

A business analyst acts as the proxy for the business representative

Unaware or not interested in the approach used by the team

Collaboration between the development team and the business side remains mostly unchanged except maybe for increased interaction between the 2 groups

Business decision are still mostly made by business analysts or architects

Project Managers

Starting to be aware of the new practices used by some of the teams

Mostly resistant to change since they are lacking information about the new process

Follow the traditional project management approach

Do not consider the Agile approach to be very solid for large scale projects

Managers

Unaware or not interested in the approach used by the team

Business as usual

Results

Teams that have adopted the Agile approach are slightly more productive

Moral is improving

Productivity varies from one team to the next

Some teams’ productivity is decreasing since they have hit important hurdles

Some teams have abandoned the new approach and have gone back to their traditional approach

Some friction between the development and the business teams in light of the new approach

Level 3 – Business Level Maturity

At this level, the solution teams have integrated the business people in the model. Collaboration (and trust) has increased and a partnership relationship is increasing.

Team

Scrum Masters are in place

The 3 Scrum roles are well understood and respected

If there is more than 1 Scrum team, a Scrum of Scrum has been put in place

External help has been used to achieve this level of maturity

Team members are attending Agile conferences

Department

There is confusion around the roles of: business analyst, architect, database administrators and project managers

The process is documented and tends to be consistent across projects

External help has been used to properly implement the Agile practices

Business

A Product Owner is clearly identified and may be dedicated to their project

The concept of incremental and iterative development is gaining more acceptance from the business representatives

Process is slowly expanding within the business side

Product Owners bring some of their colleagues to end-of-sprint demonstrations

Project Managers

Starting to be aware of the new practices used by some of the teams

Mostly resistant to change since they are lacking information about the new process

Follow the traditional project management approach

Do not consider the Agile approach to be very solid for large scale projects

Managers

Awareness is increasing at the director level within IT and Business of the new Agile approach

Many assumptions and misunderstanding remain

A strong evangelist is in place to promote the new approach and bring together the IT and business side of the organization

Results

Project teams using the Agile approach are more productive

Moral of the people using Agile is much higher than those outside the Agile teams

Some friction with project managers and people managers remain where most people tend to fall back to their traditional paradigms

Level 4 – Project Management Level Maturity

At this level, the project management approach is modified to include some of the Scrum practices. Although the department still mostly relies on the traditional PMBOK recommendations, Scrum has been integrated in the project management approach.

Team

There is a clear segmentation between the role of the Scrum Master and that of the project manager

If there is more than 1 Scrum team, a Scrum of Scrum has been put in place

Interference with the team’s activities is almost eliminated

The team is autonomous and the Scrum rituals and artifacts are respected and standardized

Department

The department has adopted many of the Scrum practices and artifacts and are using them consistently

Much of the confusion around the roles of: business analyst, architect, database administrators and project managers have been eliminated

The process is documented and is consistent across projects

External help has been used to properly implement the Agile practices

Business

Product Owners are clearly identified and are dedicated to their project

The project manager is well accepted and is part of the Product Owner team

The concept of incremental and iterative development is fully accepted from the business representatives

Process is expanding to the business side

Project Managers

Projects managers are fully aware of the new practices used by the teams

Resistance to change has been replaced with adaptation of the traditional approach to include a more Agile approach

Agile is accepted as a solid approach for large scale projects

Managers

Awareness of the new Agile approach is increasing at director level and above within the IT, Business, and Project Management organizations

Some assumptions and misunderstanding remain for managers

Training initiatives have begun for management and attendance is high

A strong evangelist is in place at the management / executive level to promote the new approach

Results

Project teams using the Agile approach are more productive

Moral of the people using Agile is much higher than those outside the Agile teams

Friction between traditional roles are being handled

Level 5 – Management Level Maturity

At this level, managers have adapted their management style to support an Agile organization. Organizational structures and reporting mechanisms are better adapted for collaboration and improved for increased performance.

Team

Scrum Masters are in place

The 3 Scrum roles are well understood and respected

If there is more than 1 Scrum team, a Scrum of Scrum has been put in place

External help has been used to achieve this level of maturity

Team members are attending Agile conferences

Department

The department has adopted many of the Scrum practices and artifacts and are using them consistently

There is no confusion around the various roles surrounding the projects

The process is documented and is consistent across projects

Business

Product Owners are clearly identified and are dedicated to their project

The project manager is well accepted and is part of the Product Owner team

The concept of incremental and iterative development is fully accepted from the business representatives

Process is expanding to the management level of the organization

Project Managers

Projects managers are fully aware of the new practices used by the teams

The traditional project management approach has been adapted to include a more Agile approach

Agile is accepted as a solid approach for large scale projects

Review the best practices to adapt to changing realities

Managers

Have fully transferred the authority and responsibility to the teams to allow them to do their job properly

Avoid interference and micromanagement

Promote collaboration and teamwork

Support continuous learning and do not systematically penalize failures

Adapt their management style to the context of their team

Results

The various projects using Scrum are more productive than those using a traditional approach

Moral is high all around

Friction around the new approach has disappeared

Strong collaboration between all parties involved

Organization is able to quickly react to changes in its environment

Management is considering implementing Agile to projects that do not require software development

Level 6 – Corporate-wide Level Maturity

Utopia or the nirvana? At this level, the entire organization – the people, the processes and the tools are aligned with the Agile principles and values. As I haven’t had the opportunity to witness such an organization (yet), I am unable to describe the criteria to be used to qualify for this level.

Welcome

If you did not already notice, Pyxis is a different company. You have surely seen that the number of smiles per hour is much higher than in traditional organizations. There are several reasons contributing to this phenomenon but for now we just want to explain the governance model used so that you understand exactly what is expected of you.

What is governance?

Corporate governance is the set of processes, customs, policies, laws, and institutions affecting the way a corporation or company is directed, administered or controlled. Corporate governance also includes the relationships among the many stakeholders involved and the goals for which the corporation is governed. – Corporate governance – Wikipedia, the free encyclopedia.

What is the management philosophy?

The management philosophy of François relies heavily on the work of Peter Block and more specifically on the audio book “The Right Use of Power: How Stewardship Replaces Leadership“. If you do not know this audiobook, we invite you to invest 3 hours to understand the philosophy. The alternative is that you will have to reconstruct the enigma over the coming weeks, so this is certainly a good investment.

What does it mean to work at Pyxis?

Before going further, it is important that you know the values and mission of Pyxis and our perspective of capitalism in the 21st century. Then comes the most difficult challenge for a new employee, you must rid yourself of your mental model of a traditional business because most of your references will not apply at Pyxis. Want examples?

In a traditional business

At Pyxis

The boss tells me what to do.

I determine how I can help Pyxis reach its objectives.

I wait for directions.

I initiate the right activities.

I have a boss.

There is no hierarchy.

I must ask for permission.

I make decisions, communicate them and make them visible on our wiki.

The company takes care of me.

I take care of myself.

I hope the organization will help me develop my skills.

I develop my skills while working on initiatives that will help Pyxis achieve its objectives.

What are the teams at Pyxis?

What do I do now?

If you have more questions than answers after reading this page, it’s normal. Most people need time to assimilate new concepts and our mode of operation. If you have questions, ask them to the people around you or help others by adding them to our wiki.

On why an Agile approach is better suited to deliver value (Thanks to Alfonso)

Most organizations that depend on software are struggling to transform their lifecycle model from a “development” focus to a “delivery” focus. This subtle distinction in wording represents a dramatic change in the principles that are driving the management philosophy and the governance models – Improving Software Economics

On the meaning of Agile transformation for managers

What many people mistakenly do is equate agile project management with doing more work, with less documentation and fewer people. Although the premise is to get more done in a more favorable way, I have never met a team that could successfully implement agile principles without having to slow down first – VersionOne – Agile Adoption For Managers.

On the fact that the true value of an organization is not mapped via its organizational chart

The interesting thing is, the further we go into agile management territory the less typical the managerial job we expect. Teams are self-organizing and cross-functional, and sometimes we think a manager should just get out of the way. By the way, surprisingly often this is exactly the best choice. But whenever one of the asshole-moments is needed, it is time to show up and do what has to be done. Otherwise the atmosphere starts rotting as people wait for someone who will fix things. Someone who will do something about this guy adding a new technology every time he reads some nice article. Someone who will deal with that lass taking a few days off because she doesn’t really care about the project being late and the team working their butts off to get back on the right track. That’s always a job for a manager, and a harsh one, no matter how self-organized the team is – Good Managers Sometimes Have to Play Assholes – NOOP.NL.

Does your organization’s compensation model and your personal attitude support prostitution?
[Note: The definition of prostitution is provided at the end of the blog post. In the context of this post, I am referring to the second and less often used definition.]

The Scenario

As the head of a large Information Technology department, you walk by Michael’s desk one afternoon and to your surprise, you notice that your system administrator is frantically switching from Google to Chat to a discussion Forum. You recall similar observations a few weeks ago so you quickly wonder if, at $80K per year, you are getting your money’s worth for a system administrotor who always seems to browse the internet. To make matters worst, you don’t even remember when was the last time your company ran into serious systems issues. Do you need Michael on your team? Maybe he is a good candidate for the headcount reduction you have been imposed by Finance.

A few days later, on your way out of the office around 7:15 pm you hear key strokes and notice that Kim is still working. You remember approving Kim’s over time report last month and start to realize that the increase in ERP support calls might be starting to impact Kim’s work-life balance. Remembering your conclusion about Michael, you wonder if you shouldn’t close the system administrator position and add resources to Kim’s team. At $55K per year, you would still be able to cut your budget spending. Pleased with your conclusion, you briskly walk to your car hoping for a nice family dinner.

A New Concept

Here’s a new concept. For people working in most traditional organizations, this will sound like a really weird concept but what if employees decided their own working hours? I’m not talking about the flex time concept where people decide what time they wish to start and end their work day but actually decided how many hours and which hours they worked?

Typically, the traditional work week varies by company and by country. A standard work week in Canada is somewhere between 35 and 40 hours per week. Some would argue they work many more hours per week but that’s not where I want to take this discussion.

Imagine for a moment you stopped controlling the hours worked and focused instead on the results. Granted, this is a much more complex endeavor but in my opinion much more suited to year 2010.

The Old Paradigm

At the beginning of the industrial age, many employees were paid “by the piece”. For every bolt fastened, shirt sowed, or widget delivered they received a small amount of money. Eventually, companies realized that it would be more predictable and easier to manage if people were paid by the hour. Needless to say, the model has somewhat evolved and employees are currently paid by the hour, by the day, by the week, or by the year but the model pretty much remains the same.

The New Paradigm

The new model I’m proposing is to offer a fixed salary (or a risk salary), without any expectations of number of hours worked. Instead of expecting people to work 40 hours per week, people would be expected to deliver value or results. As I mentioned, it is certainly more difficult to set up the type of results expected but on the other hand, isn’t this the basis of commerce – I pay you $x for this good or service without any consideration about how many hours were required to produce it. The production piece is the responsability of the seller, not the buyer.

Back To The Scenario

Pleased with the previous day’s conclusion, you call into your office Michael and Kim’s direct supervisor to share your thoughts. Michael’s boss explains that since hiring him 2 years ago, systems outage have dropped 92% as Michael is consistently looking for ways to improve systems availability. He heavily praised Michael for creative and pragmatic solutions and despite the fact the Michael rarely has to do overtime, he would recommend him for a promotion.

Slightly shocked, you turn to Kim’s boss and ask for comments on her employee. With a grin on her face, Kim’s manager tries to hold back her answer as it certainly wouldn’t make you look good. She explains that Kim clearly lacks analytical abilities which is why she has to spend more time than all her colleagues solving similar issues. In addition, Kim is a poor team player. She likes to think of herself as a super-hero and she prefers trying to handle problems without the help of her team mates which often leads to repeated issues as the root problems are rarely solved properly the first time around. Despite many attempts at helping Kim with her shortcomings, she doesn’t feel the need to improve since she is often praised by the head of the department for putting in long hours…

(Silence in the room)

Embarrassed and apologetic toward both managers, you realize your attitude toward the number of work hours per week may have had the opposite effect that you were originally looking for. You genuinely thank your employees for their valuable feedback and wonder if you shouldn’t aim to leave early today…

pros·ti·tu·tion (prst-tshn, -ty-) – NOUN:

The act or practice of engaging in sex acts for hire.

The act or an instance of offering or devoting one’s talent to an unworthy use or cause.

Do you ever say to yourself “I wish there was no hierarchy in our company“?

Wouldn’t it be a perfect world if there were no hierarchy in organizations? Everyone working in harmony, collaborating to achieve their goals with no annoying boss telling anyone what to do. In this hierarchy-free world there would be no supreme ruler over the teams, only happy people delivering their work with birds chirping in the background…

OK, I realize I’m pushing it a little but people who systematically oppose to specific organizational structures often have an idealistic perspective of the world. Fortunately, the world isn’t black or white, there are many nuances.

I have had discussions about hierarchy-free organizations with many people over the last few months. Repeatedly, people bring up the same reasons why they don’t like hierarchies. From their perspective, hierarchies are bad because:

they don’t let employees perform their work as they wish;

they allow authority over people;

they break communication channels;

they create a distinction between the boss and the employees;

they don’t treat people equitably;

they offer more benefits to people at the top;

etc.

What if hierarchies weren’t the problem? What if the cause of these issues was somewhere else? What if the organizational structure wasn’t the real problem? Not that I am a huge fan of hierarchies, but I do not believe the organizational structure is the real problem – people are!

Let me explain my perspective.

I feel that blaming hierarchies as the reason people hate their job and feel under-appreciated is short-sighted. Organizational structures have much less to do with how people feel than the management style and attitude of the leaders.

Let me repeat that statement. I believe that the attitude and behavior of the leader has greater impact on the team members’ performance and happiness in the workplace than the organizational structure under which they operate.

You are not convinced? You might want to try this exercise.

Can you think back of a time when you felt empowered to do your job and were happy to be at work? Can you recall a time when you would invest long hours working on a project and your energy level was going though the roof? If you answered yes to these questions, ask yourself this other question “was it because of the hierarchy-free structure or the leader’s attitude”?

If you have had the opportunity to work for a great leader – someone who gives you freedom to do your work, holds you accountable for the results, is always supportive and available for mentoring, and gives you credit for your work – you will immediately realize that the leader’s behavior and attitude were the underlying causes of your satisfaction. A bad leader in a hierarchy-free organization will make everyone’s life miserable while a good manager – even in a position of authority – will get amazing commitment from his people.

It might be that the people against hierarchies are ones that never had the opportunity to work for a great leader and so, assume that the organizational structure is the issue. I wish them to find a great leader to work with because in the end, the leader’s attitude has much more to do with a happy and productive work environment than the actual structure of the organization.

Since my first post on this topic, a few people asked me why I thought communities were a new way to organize and what complexity there was in applying communities to a business setting (i.e. for-profit organizations). I have defined what is a community in a business context and some of the rules they follow. Below are some of the recurring questions and their associated answer.

In a business context, what is a community?

In a business context, communities are similar to functional departments with some fundamental distinctions. In traditional setting, members of a functional department or of a project team work together to achieve a goal. With some exceptions, team members share nothing but their common goal and a common boss. By comparison, in addition to sharing a common goal members within a community also share common values and culture and they operate within agreed upon self-defined norms. I provided a few examples here.

Why are communities in the context of business different from other communities?

Communities that come together to carry out a goal are common but communities that aim to generate revenue to autonomously support themselves are no frequent. In traditional for-profit organizations, shareholders through board members select the management team for the organization. The management team (President, CEO, COO, etc.) become accountable to the board for their performance and as such almost always use a top-down (command-and-control) approach.

By contrast, communities rely on a bottom-up approach to decide their goals and those are seldom oriented toward profit.

Aren’t communities completely disorganized and as such, couldn’t work in a business context?

Communities could be disorganized but they wouldn’t be effective. Communities typically set up rules that will allow them to work efficiently. What may seem like disorganized entities within traditional organizations may actually bring better results.

In certain situation, a larger community may ask sub-communities to run within certain guideline and as such, would cut disorganization.

Why use communities as organizational structure?

Because communities are living cells, they are components of a living organism and are able to adapt to their environment.

A community can be born, live and die. A community arises when 2 people come together around a common goal, and decide to form a community.

A community dies when less than 2 people deploy energy to sustain it.

What rules govern a community?

I already provided an answer in this post but typically, communities work by the rules defined by their members. Some rules are implicit while others are explicit and clearly adapted to the needs of the community. The community may decide to create a space for expression and revision of its rules.

How can someone join a community?

Individuals can join a community by expressing their interest in the community, ensuring they are motivated by the goals the community has set, and by adhering to the rules of that community. Further information on this topic can be found in this post.

Can a community expel a member?

According to the rules under which it operates, the community may choose to expel one of its members. It is important to establish that the decision to evacuate a member is serious and can not be done without the approval of the majority (or unanimity) of group members.

An individual is part of a community if he is active in this community. Being active in the community means to actively and positively contribute to achieving the goals set by the community by working with other members of this community. If an individual is not active in a community, it is not part of that community (even if his name appears in the list of members).

How many communities can an individual belong to?

People can belong to as many communities as they wish. Individuals alone are responsible for setting their limit.

What is the largest number of members in a community?

There is no set limit.

If the number of members is jeopardizing the operational effectiveness of the community (9 members in a team would be a reasonable number), then it is likely that the community will divide itself into 2 communities, each pursuing different sub-objectives.

What is the role of leader of the community?

A leader is appointed only if the community decides to appoint one, and its role is defined by the community. Typically,

the leader ensures the respect of the common rules that the community has given itself;

the leader ensures that the community is visible and transparent;

the leader is the one who will link with other communities.

Who chooses the leader of a community?

Unlike traditional businesses where leaders (managers) are selected or appointed by their supervisor, the leader of a community is chosen democratically by the members of the community. Similar to the concept of holacracy, the leader emerges from the group because of its expertise and its commitment to advancing the community towards achieving the goals it has set.

Are all communities are connected?

Maybe, maybe not.

The link between 2 communities may be at least 2 kinds:

members belonging to more than 1 community;

a need expressed by a community for the services provided by another.

A community that needs support or resources from another community therefore becomes automatically linked to another community.

Can a community exist independently?

If it apart from other communities, the answer is “yes”: For example, communities of practice are primarily in service to their members, and this is enough.

Is that all communities have financial goals?

No. Basically, communities set their own goals.

As a commercial enterprise, some communities have financial goals to make sure growth and sustainability of the organization.

By contrast, other communities will be directly or indirectly serving communities with financial goals but will not themselves financial targets.

Other communities are communities of interest and have no link with strict financial targets.